selling for P 12. The company pays P112.50 to place an order. The monthly demand fo product is 5,000 units. Required: a. Annual inventory carrying cost b. Annual inventory ordering cost c. Total inventory costs

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Based on EOQ analysis, the optimal order quantity is 3,000 units. Annual inventory carrying cost
equal 30% of the average inventory level. The company pays P 5 per unit to buy the product,
selling for P 12. The company pays P112.50 to place an order. The monthly demand for the
product is 5,000 units.
Required:
a. Annual inventory carrying cost
b. Annual inventory ordering cost
c. Total inventory costs
Transcribed Image Text:Based on EOQ analysis, the optimal order quantity is 3,000 units. Annual inventory carrying cost equal 30% of the average inventory level. The company pays P 5 per unit to buy the product, selling for P 12. The company pays P112.50 to place an order. The monthly demand for the product is 5,000 units. Required: a. Annual inventory carrying cost b. Annual inventory ordering cost c. Total inventory costs
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